By Estine Ojoh Okolo   

INTRODUCTION.

            Debt is as old as human existence. In Nigeria, Insolvency procedures are mainly contained in the Companies and Allied Matters Act Cap C20 Law of the Federation of Nigeria 2004 (CAMA), even though there are pockets of other legislations with features of insolvency.

Insolvency has been described as a situation when a legal or natural person is unable to pay debt. Over the ages, every definition or description of this concept has always pointed to the same result, that of inability to pay debt.  Section 567(1) of the Companies and Allied Matters Act 2004 defines an Insolvent person as follows.

Any person in Nigeria who in respect of any Judgement, Decree or Court order against him, is unable to satisfy execution or other process issued there on in favour of a creditor and the execution or other process remain unsatisfied for not less than six week.

This definition requires an order of court to establish that a person is insolvent, whereas in practical situation, corporate insolvency means the in ability of a debtor to meet with its commercial commitment to its creditors. The problem with this definition is that it is restrictive and does not put into consideration other processes that come to play before the order of the court. Insolvency, just like other Nigerian Laws, is based on common law, precedents and local statutes like CAMA and to some extent the Asset Management Corporation of Nigeria Act. On the other hand, Section 247 (1) of the Insolvency Act of UK 1986 defines it thus;

In this Group of parts except in so far as the context otherwise    

                     requires, Insolvency in relation to a company include the approval of a

                    voluntary arrangement under part 1, the making of an administration order

                   or the appointment of an administrative receiver

In United Kingdom Insolvency and Bankruptcy is substantially contained in a single statute. The main sources of law in this regard are the Insolvency Act of 1986, the Insolvency Rule of 1986, the Company Director Disqualification Act 1986, Employment Right Act 1986, Employment Right 1996, Part X11 of the Insolvency Regulations (EC) 1346/ 2000.Other aspects of laws that relate to Insolvency in UK includes case laws and Labour related cases. Over there, insolvency is categorized into two types.

  1. Individual Bankruptcy which Part X of UK Act referred to as individual insolvency and corporate insolvency

The words relating to Insolvency has its origin in Latin not solvetem which means not paying. However, aspect of corporate Insolvency could be said to have begun with the first modern companies Law legislation. Just like in the past, Insolvency has it root in bankruptcy Law. Bankruptcy was part of the earliest legal system. The Hammurabi Code of (2250 BC),the Twelve Tables of Roman Republic (450 BC), the Talmud (200 AD) and Corpus Juris Civilis (534 AD) all had procedures for distributing losses amongst creditors and to satisfy debt, a debtor has to bear the implication of his or her indebtedness. The Bankruptcy Act of 1542 in United Kingdom evolved a sort of proportional distribution of debt among the creditors. In some cases, debtor could be made criminally liable for the debt. The Fraudulent Conveyance Act of 1571 provides that any intentional transaction by debtor, after having been declares as bankrupt would be void. The Bankruptcy Act of 1705 empowered the Lord Chancellor to discharge a bankrupt from having to repay all debt, once disclosures of asset and procedure have been complied with.  Debtors were mostly imprisoned. The advent of the Industrial Revolution changed a lot of things and business enterprises continued to grow, though, the privilege of an investor to limit liability upon insolvency was not available to the general public. According to M Lester, in his Victorian Insolvency, published by Clarendon in 1995, between 1931 and 1914 nearly 100 Bills on Insolvency were introduced by parliament. The Insolvent Debtor (England) Act of 1813 established a specialist court for the relief of insolvent debtors. Other statutory provisions relating to insolvency are, The Bankrupts (England) Act of 1825, Insolvent Debtors Act of 1842, Joint Stock companies Act of 1814, Limited Liability Act of 1855 which restricted shareholders risk to the amount already put in the business in case of insolvency. The Bankruptcy Act of 1861 not only allowed traders to file for bankruptcy, but with the passage of the Debtors Act of 1869, imprisonment for debt was abolished. Insolvency protection was completed and sealed in the famous case of Solomon vs. Salomon and Co Ltd (1897) AC 22.

A booth maker incorporated a company but was later forced into insolvency. His wife and children were nominal shareholders. He was sued personally by the liquidator for the debt of the company. Having earlier taking a floating charge over the company’s assets, his claim ranked first in terms of priority against other creditors.

The house of Lord held that he was protected under the Companies Act and that the business was distinct from Mr Salomon. According to Company Law experts, the case of Salomon v Salomon (supra) completed the series of reforms in the aspect of protecting an insolvent from destruction. Salomon’s case gave room for the preferential payment in Bankruptcy Amendment Act 1897. It provided for Preferential Creditors to have priority over the holder of floating charge. The Insolvency Act of 1986 was promulgated as an aftermath of Kenneth Corks Report on the Review Committee on Insolvency Law and Practise 1982, CMD 8558

.The Act is significant because it created the administrative process for managers of insolvent company to rescue such a company. The Enterprise Act came into existence in 2002. It is worthy of mention  that Section 214 of the Insolvency Act of 1986 imposed liability on directors from wrongful trading especially if directors fails to start Insolvency Proceedings when they ought. In 2007, following the economic meltdown all over the globe, there were series of insolvencies of companies but for now the situation has improved.

It is worthy of mention here that unlike in Nigeria, in the United Kingdom, the court is empowered to make an administration order, appointing a person referred to as an administrator to see to the survival of the company, whole or part of its undertaking, approval of voluntary arrangement and or for a mere advantageous realisation of the company assets in case of wounding up.

While Individual Insolvency involves the inability of individual or natural persons to pay his or her debt, corporate insolvency has to do with companies or corporation who are unable to pay their debts. And the distinction between cash flow insolvency and Balance sheet insolvency is that while Cash flow Insolvency is a temporary cash crisis, and a situation where a legal entity can no longer met the debt obligations on time as they fall due, balance sheet insolvency will arise where company liability exceed the assets of the company . Cash flow insolvency relates to proper case for business rescue consideration. And it is usually applied to a company for the purpose of testing it insolvency. The cash flow test is to the effect that a company must be unable to pay its debt as they fall due. Balance sheet insolvency establishes a typical case of liquidation. This is distinct from secured credit which has to do with lending and enforcement procedure of securities created as collateral to the loan transaction. Most importantly, there should be no substantial dispute as to the amount owed by the company  In the case of Stonegate Securities Ltd v Gregory (1980)CH 576  which concerns the liquidation procedure when a company is unable to repay its debts. Mr. Gregory had in accordance with statutory provisions served a notice, demanding payment of a £33,000 debt within 21 days on Stonegate Securities. Stone gate had agreed to buy shares in Mr. Gregory’s property company, Trinette Ltd, when it got planning permission. The company accepted there was a contingent or prospective liability, but argued the debt was not presently due. At the first instance, Mr. Gregory accepted that there was a dispute about when the debt was due, and insofar as the debt was contingent that the contingency might never happen at all. The company sought an interlocutory relief restraining the petition. It held that a winding up petition would not be granted to a petitioner to whom a debt was bona fide under dispute.  On appeal Buckley LJ held that Mr. Gregory’s claims must fail. The company had in good faith and on substantial grounds disputes any liability in respect of the alleged debt, the petition was dismissed.

INSOLVENCY PROVISIONS IN NIGERIA.

Inability to pay debt have been statutory described in Section 409 of the CAMA. According to the provisions, a company shall be deemed to be unable to pay its debt if.

  1. A creditor by assignment or otherwise to whom the company is indebted in a sum exceeding #2000 then due has served on the company by leaving it at its registered office or head office, a demand under his hand requiring the company to pay the sum so due and the company has for three weeks thereafter neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor or.
  2. execution or other process issued on a judgement, decree or order of any Court in favour of a creditor of the Company is returned unsatisfied in whole or in part or
  3. The Court after taking into account any contingent or prospective liability of the company is satisfied that the company is unable to pay its debt.

However Section 123(1) of Insolvency Act of the UK 1986 states as follows;-

                                                  A company is deemed unable to pay its debts- inability to

  • if a creditor (by assignment or otherwise) to whom the pay

debts.company is indebted in a sum exceeding £750 then due has served on the company, by leaving it at the company’s registered office, a written demand (in the prescribed form) requiring the company to pay the sum so due and the company has for 3 weeks there- after neglected to pay the sum or to secure or com- pound for it to the reasonable satisfaction of the creditor, or

(b) if, in England and Wales, execution or other process issued on a judgment, decree or order of any court in favour of a creditor of the company is returned un- satisfied in whole or in part, or

(c) if, in Scotland, the induciae of a charge for payment on an extract decree, or an extract registered bond, or an extract registered protest, have expired without payment being made, or (d) if, in Northern Ireland, a certificate of unenforceability has been granted in respect of a judgment against the company, or (e) if it is proved to the satisfaction of the court that the company is unable to pay its debts as they fall due.

(2) A company is also deemed unable to pay its debts if it is proved to the satisfaction of the court that the value of the  

                                               Company’s assets is less than the amount of its liabilities, taking         

                                                 into account its contingent and prospective liabilities.

                                                (3) The money sum for the time being specified in subsection  

                                                (1)(a) is subject to increase or reduction by order under section

                                                 416 in Part XV

Though Section 409 provides a test for declaring a company insolvent in Nigeria, when compared with the English provisions on situations that constitute inability to pay debt, section 409 of the Companies and Allied Matters Act has been said to be a lazy test or condition for declaring a company insolvent. Considering the amount involved in section 409 (1), it is not only ridiculous but also laughable and make no sense when the daily inflation is put into considered. The challenge posed by such provision is that there is the tendency that the law on this aspect might be abused, especially with regard to putting an end to an otherwise viable companies on such condition. One of the requirement is that a demand must also be made on the company for payment of the debt owed.

It is the opinion of Chief Anthony Idigbe SAN in his write up titled The Nigerian Insolvency Law and the Right of Creditors and Account holders of Intermediated Security vis a vis the Insolvent Intermediary being a paper delivered at SEC on Unidroit workshop on intermediated securities held in May 2009 that the basic framework for Insolvency in Nigeria is rather obsolete. The highly revered Senior Advocate of Nigeria was of the view that the Nigeria general Insolvency framework is deficient.

Section 462(1-5) deals with Declaration of Insolvency. Section 462 (2) states as follows

A declaration made as aforesaid shall have no effect for the purposes of this Act unless. (a) It is made within 5 weeks immediately preceding the date of the passing of the resolution for winding up of the company and is delivered to the Commission for registration before the date. (b) It embodies a statement of the Company’s assets and liabilities as is the latest practicable date before the making of the declaration.

This subsection must not be read in isolation of section 462(1). The interpretation of the two subsection, is in my humble view, that after a proposal for winding up of a company has been made by two or majority of the directors, depending on the numbers of directors, they may make a statutory declaration to the effect that the company will be able to pay its debt fully within a period of 12 months. The said declaration must be made within 5 weeks immediately preceding the date when the resolution for winding up was passed and such declaration must be delivered to the commission for registration. It should include the assets and liability of company before making the declaration.

Subsection 3 of the section mentioned above provides punishment for any false declaration made by a director to the effect that the company will be able to pay its debt. The subsection will help reduce the incidence of false declaration by the directors and will prevent a situation where the company instead of been wound up will continue to be used as instrument of fraud.

It is worthy of mention that the bulk of the framework of Nigeria Insolvency regime, is contained in part XIV (14), XV (15) and XVI (16) of CAMA on Receivership and Manager, Winding up of companies, Arrangement and Compromise respectively.

Winding up is one of the consequences of Insolvency. However, it does not necessarily mean that once a company is insolvent, it must automatically be wounded up.  Part XIV (14) deals with Receivership and Manager. Section 387(1) provides for the categories of people that cannot be appointed as a receivers. They include an infant, person of unsound mind, corporate body, undischarged bankrupt, a director or auditor of the company or any person convicted of offences involving fraud. It is the view of Dr Kunle Aina in his Rethinking the Duties of a Receiver and Powers of Companies in Receivership under Nigerian Law, that failure of the Act to expressly provide for any qualification for the appointment of a receiver may give room for the appointment of incompetent persons as receivers, since there is a presumption that anyone that does not fall within the list of disqualified persons can be so appointed.

Section 387 (2) makes it voidable, if any of the persons named above  act as receiver and it also went further to provide a fine of #2000 for corporate body or a term of imprisonment of 6 months for individuasl or #500 fine. The framework for Receivership and Manager is contained in section 387 -400 of Companies and Allied Matters Act of 2004.

Part XV deals with Winding up and by virtue of Section 401(1) of CAMA, Winding up can be by;-

  1. The Court
  2. Voluntarily
  3. Subject to the supervision of the Court

Winding up by the court

A company may be wound up by the Court in the following circumstances

  1. When the Company has by special resolution resolved that the company be wound up by the court.
  2. Default is made in delivery of the statutory report to the Commission or in holding statutory meetings
  3. The number of members is reduced below two
  4. The Company is unable to pay its debt
  5. The Court is of the opinion that it is just and equitable that the company be wound up

Under this head, before presenting a Petition for winding up by the court, a resolution has to be passed for voluntary winding up and winding up would have been deemed to have commenced immediately, except when fraud, mistake is established .After the petition for winding up, the court may dismiss it, adjourn the hearing on a condition or unconditionally or make an interim order or any orders that it deem fit. Section 418 provides that an order for winding up shall operate in favour of all the creditors and of all the contributories of the company as if made on a joint petition of a creditor and of a contributory. The court also have the powers to appoint an official receiver and a liquidator for the purposes of conducting the winding up.

Voluntary Winding Up

The company may voluntarily wind up on the condition listed below;-

  1. when the period fixed for the duration by the has expired or if an event provided by the article has occurred

b .If the Company resolve by special resolution to wind up.

It is worthy of mention that the effect of winding up, is that from the commencement of winding up, the company ceases to carry on business. Also within 14 days after a resolution for winding up has been passed, the notice of the resolution has to be advertised in the Gazette or two daily newspapers and to the Commission.

Winding up subject to the supervision of the court

When a company passes a resolution for voluntary winding up, the Court may on petition, order that the voluntary winding up shall continue but subject to the Courts supervision. The effect of this type of winding up is that it is deemed to be a petition for winding up by the court. Just like the situation of the provisions in the CAMA which provide for disqualification of receiver under section 387, section 509 (1) provide for disqualification of liquidator.

Section 519 (1) provides that in all matters relating to winding up of company, the court can order for a meeting of the creditors to be called and it shall have regard to individual debt.

The Corporate Affairs Commission can also strike out the name of the Company from its registers, if the company no longer carry on business. However, an aggrieved member may within 20 years apply for restating of the name of the company on the register.

After completion of winding up, officers of the court are expected to make a returns to the commission. This is the provisions of section 530 of CAMA.

Part XVI deals with arrangements and compromise

Under Corporate Insolvency, where there is insufficiency of assets of the company to meet the debt need of the company, it is the general creditors that are usually at risk. However with the emergence of the Act which established the Asset Management Corporation of Nigeria, bank related insolvency has been further strengthened with a rescue-friendly environment.  Often, because, debt may not be paid on fully to every creditor, then creditors will have to stand in competition with one another for a share of the remaining assets. This has propelled a situation where in cases of insolvency, a statutory priority fixes order among the different types of creditors.

In order of priorities in relation to Insolvency, section 494 of CAMA provides for preferential payment in case of winding up and these include all local rates and charges due from the company at relevant date and having become due within 12 months .They include PAYE tax, deductions, assessed tax, property or income tax from companies, deduction under National Social Insurance Trust Fund Act, salaries of servants, wages of workmen and accrued holiday remuneration just to mention a. few. It was on this basis that Dr Kunle Aina posits in his papers titled Procedure for  Registration of Charges in Nigeria-Need for urgent reforms, that the essence of registration of charges is to give potential lenders and parties dealing with a company the accurate and actual situation of the obligation of the company to its creditors, especially whether the company is already overburdened with loan obligation and credit, mostly as to ranking of creditors in the event that the company becomes insolvent.

WHO CAN BRING APPLICATION FOR WINDING UP?

Section 410 provides for the categories of persons who can bring up a petition for winding up. They include; the company, creditor i.e. contingent or prospective creditors, official receiver, contributory, a trustee in bankruptcy to or personal representative of a creditor or contributory, the Commission under section 323, a receivership, if authorised by the instrument under which he has been appointed or by all or any of those parties together or separate.

Section 410 ( 2) (c) provides that unless sufficient security for cost has been given and a prima facie case for winding up has been established, the court shall not hear winding up petition presented by a contingent or a prospective creditor. It is important to mention here that Section 418 of CAMA provides that an order for winding up shall operate in favour of all the creditors and of all contributories of the company as if made on the joint petition of a creditor and of a contributory.

The court also has the power to stay an order for winding up or make an order staying proceeding for a limited time or such term as the court may deem fit to make.

Section 462 (1-5) provides for statutory declaration of insolvency when proposal to wind up voluntary. Section 465 (4) provides for; member voluntary winding up and creditors’ voluntary winding up.

Section 471 provides that sections 472 to 748 of the Act (which has to do with meeting of creditors, appointment of liquidator and creaser of liquidator’s power, appointment of committee of inspection, fixing of liquidators remuneration, power to fill vacancy in the office of liquidator and final meeting and dissolution) shall apply in relation to creditor’s voluntary winding up. The purport of this provision is to show unequivocally the procedures to be followed, if the winding up is that of creditors’ voluntary winding up. The procedure shall be as follows;

  1. There shall be meeting of creditor caused by the company. It is to be held for resolution for winding up, which shall be proposed.
  2. The Notice of meeting of creditors shall be published in Gazette or at least two newspapers printed in Nigeria and circulated in the locality where the company is.
  • The directors shall ensure a full statement of the Company’s affairs, list of creditors, and their claims shall be laid before the meeting by the director. One of their member shall also be nominated to preside over the meeting etc.

In Ado Ibrahim v Bendel Cement Ltd (2007) 5.MJSC page 1 at page 4, the court  held that one of the grounds for winding up especially under Section 408 is on a just and equitable grounds . In that case, the Petitioner filed for winding up of the respondent on the ground that the Company has become irredeemably insolvent. The contention of the Petitioner was on the ground that the petition was brought as a contributory and as a creditor. The Court of first instance found for the petitioner. On appeal,  though the Court of Appeal found for the petitioner that he was entitled to present the petition as a contributory, on just and equitable grounds, the petition was struck out. On further appeal to the Supreme Court, by the Petitioner (Appellant) the appeal was unanimously dismissed and the Court held that there were no just and equitable grounds to grant an order of winding up.

The need to establish with certainly the sum owed by the company before proceeding with a winding up petition cannot be over emphasised. An order of winding up hurriedly made will not only impact adversely on the totality of the Company but on the public which supplies its workforce and that same workforce could be thrown out unceremoniously to the market of unemployed, thus foisting hardship on the society (supra).

 PROPER COURT AND MODE OF BRINGING INSOLVENCY PROCEEDING.

The proper Court to bring Insolvency proceedings is the Federal High Court .This is by virtue of Section 251 (1)( e) of 1999 Constitution as amended. It states as follows;-

Notwithstanding anything to the contrary contained in this constitution, and 

                   In addition to such other jurisdiction as may be conferred upon it by an Act

                   of the National Assembly, the Federal High Court shall have and exercise

                   Jurisdiction to the exclusion of any other Court in civil causes and matters-

                  (e) arising from the operation of the Companies and Allied Matters Act or

                   any other enactment replacing that Act or regulating the operations of

                  Companies incorporated under Companies and other matters Act 

Section 407 of CAMA also alluded to this very fact as to the jurisdiction of Federal High Court to hear such matters with specific reference to winding up proceedings.  And it shall be by way of petition.

 INSOLVENCY IN OTHER JURISDICTIONS.

As part of rescue plans or action leading to and before liquidation, Section 14 of the Insolvency Act of 1986 provides for;

(a )  The appointment of an  administrator to manage  the affairs of Company balance the respective interest of the company and  the  creditors with a view to rescuing the company from liquidation, including powers to remove director or appoint any person as director19. However, if the   Company is not saved by this process, it will go into liquidation

(b) A Company Voluntary Arrangement;- This is usually form of an agreement where the  Company and its creditors agree that a fixed amount which is usually lower  than the total debt be paid instalment ally (usually on a monthly basis) and after some  time the remaining part of the debt will be written off

In Britain Section 390 provides for the qualification to enable a person become an Insolvency Practitioner thus;-

  • A person who is not an individual is not qualified to act as an insolvency

Practitioner as insolvency practitioners.

  • A person is not qualified to act as an insolvency practitioner at any time

  unless at that time- (a) he is authorised so to act by virtue of membership of a professional body recognised under section 391 below, being permitted so to act by or under the rules of that body, or (b) he holds an authorisation granted by a competent authority under section 393.

  • A person is not qualified to act as an insolvency practitioner in relation to

another person at any time unless- (a) there is in force at that time security or, in Scotland, caution for the proper performance of his functions, and (b) that security or caution meets the prescribed requirements with respect to his so acting in relation toy that other person.

  • A person is not qualified to act as an insolvency practitioner at any time if

at that time- (a) he has been adjudged bankrupt or sequestration of- his estate has been awarded and (in either case) he has not been discharged, (b) he is subject to a disqualification order made under the Company Directors Disqualification Act 1986, or 1986 c. 46. (c) He is a patient within the meaning of Part VII of the Mental Health Act 1983 or section 125(1) of the mental 1983 20. Health (Scotland) Act 1984. 1984.

Under the English Law,the Secretary of States is empowered to constitute an Insolvency

Practitioners Tribunal and amongst other powers of the tribunal, is the power to terminate the

Membership of a practitioner. By Virtue of Section 419 of the UK Insolvency Act, the

Secretary of States may make regulations for the purposes of insolvency practises,

Jurisdiction, laying down the conditions upon which a creditor could be adjudicated on his own petition or on a petition by a creditor.

It is interesting to note that in India, within the context of corporate law, the word Insolvency is not defined. However section 433(e) of the companies Act of India 1955 merely covers companies which are unable to pay its debt. India has gone further to promulgate the Sick Industrial Companies (Special Provisions) Act of 1985 .It is essentially remedial and ameliorative.

Under the South African Law a debtor is not expected to enter into contracts which purport to dispose of his estate. Section 8 (g) of South African Insolvency law provides that an Act of insolvency shall have been committed if a notice in writing is given by the creditor to the debtor. The notice must be in writing and not oral. Also under the South African Law, an act of Insolvency committed by a spouse in a marriage in community of property, operates as an act of insolvency by his or her partner.

The rule of privileged information is not applicable to insolvency matter. Also an application can be brought by one or two creditor for Sequestration or debtor’s estate and the creditor must have a liquidated claim of R100 or R200 round if they are two creditors.  Sequestration order is to secure the orderly and equitable distribution of debtor’s assets where they are insufficient to meet the claim of creditors. It is used in relation not to the debtor, but his estate, though the debtor himself and the estate could be insolvent. The Insolvency Act of South Africa provides that insolvency has to do with a diminished legal incapacity imposed by a court on a person who is unable to pay his debt.

CRITIQUE OF LAW INSOLVENCY IN NIGERIA.

In Nigeria, there is no single body of law known as Insolvency Act which contain the meaning, right of parties and extent of Insolvency action against a legal personality.

Insolvency provisions in the CAMA are not only inadequate but have been overtaken by developments in the sector and technologically. Insolvency as a term is not clearly defined in CAMA. The description provided for in interpretation section of CAMA is not adequate for insolvency practise. There is no code of practise for insolvency practitioners in Nigeria, thereby leaving the practise largely unregulated uncoordinated and subject to the whim and caprices of individual practitioners. The provisions contained in CAMA are largely outdated and not in line with current best practises. The Insolvency provisions in Nigeria at the moment does not put into consideration the impact and effect of evolving technological developments.

Court pronouncements on that area of the law is scarce, due to the technical nature of going through the process. The tortious process to justice in Nigeria has not helped matter

The regulatory framework for insolvency especially as provided for in CAMA is weak and vulnerable to abuse. There is no provision for Insolvency Tribunal as in civilized countries like Britain.

RECOMMENDATIONS.

  1. There should be a single body of law on Insolvency to provide the practice direction for its practitioners.
  2. Provisions of CAMA should be amended to bring Insolvency in line with current global best practises.
  3. There should be a code of practise for insolvency practitioners.
  4. Insolvency Practitioners should undergo continuous training programmes to update their knowledge on the area of law.
  5. There should be a tribunal to attend specifically to Insolvency matters just like we have in Britain.
  6. The regulatory framework for insolvency practise should be improved upon by equipping the relevant agencies for effective monitoring, supervision and if need be invoke the relevant sanction.

CONCLUSION.

In conclusion, it will be wrong to say that Nigeria does not have any law on insolvency. The truth is that there are selected provisions of insolvency related issues in the statute books, especially with bulk of it in the in the Companies and Allied Matters Act, AMCON Act and a couple of others legislations. However these provisions are not adequate. There is a very long gap between the provisions and practise of insolvency in Nigeria. To state that reform is needed in the insolvency practise in Nigeria is to say the obvious. What better words can best describe the totality of the law on insolvency than those contained in the preamble of the Insolvency Act 1986 of the United Kingdom?

                          An Act to consolidate the enactments relating to company    

                          Insolvency and winding up (including the winding up of companies

                          that are not insolvent, and of unregistered companies); enactments  

                          relating to the insolvency and bankruptcy of individuals; and other

                          enactments bearing on those two subject matters, including the 

                          functions and qualification of insolvency practitioners, the public

                          administration of insolvency, the penalisation and redress of

                          malpractice and wrongdoing, and the avoidance of certain

                          transactions at an undervalue

It is encompassing. Nigeria should take a cue from this and come up with a comprehensive law on insolvency and its related matters.

REFERENCES

Estine Okolo  LL.B , BL, LL.M  is a Legal Practitioner  email;-estineokolo@yahoo.com

1.Asset Management Corporation of Nigeria Act of 2010.

2.Bankruptcy Act of Nigeria 1990

  1. Companies and Allied Matters Act 2004
  2. Dr .Kunle, Aina, Procedures for Registration of Charges in Nigeria-Need for urgent

reforms , Senior Lecturer faculty of Law, University of Ibadan Nigeria

5.Dr. Kunle Aina . Rethinking the Duties of a Receiver and Powers of Companies in

Receivership under Nigerian Law. Gravitas review of business and property law. Vol. 6

No. 2. pg 60

6.Federal High Court Rules 2009 Insolvency Act of UK 1986

  1. Insolvency Act of United Kingdom 1986

8 .Insolvency Act of South Africa

9.J A Dada, Principles of Nigerian Company Law, Faculty of law , University of Calabar,

Published by Wilson Publishers (2005)

10.What is Creditors Voluntary Liquidation and how could this type of Voluntary

Liquidation help us- retrieved on 9th November 2014

11.Report of the Review Committee on Insolvency Law and Practice (1982) CMND 8558

  1. The Nigerian Insolvency Law and the right of creditors and Account holders of intermediated Security vis a vis the insolvent intermediary being a paper delivered at SEC on Unidroit workshop on intermediated securities held in Nigeria in May 2009
  2. Orojo O. Company Law and Practice in Nigeria. 5th edition LexisNexis Butterworth’s

2008 p. 443

  1. Paul L. Davies ‘’ Gower and Davies’ principles of Modern Company’’ 7th ed; London,

Sweet & Maxwell, 2003.

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